In the 2018 case, the plaintiffs offered eight plus factors, including trade-press statements about supply discipline and attendance at the same industry events, and both courts found them consistent with each company independently deciding that flooding a recovering market would be stupid. An oligopolist declining to start a price war isn’t evidence of a cartel; it’s evidence of an oligopoly.
What’s new in this case is that the complaint alleges the three memory makers used their pivot to high-bandwidth memory as a coordinated pretext to gut commodity DRAM output, curtailing DDR3 and DDR4 production far beyond what HBM demand required and starving the market that feeds PCs, phones, and servers.
The filing stacks supporting plus factors on top, including near-simultaneous production cuts announced in late 2022, Micron's decision last year to shut down its consumer-facing Crucial memory business and remove a retail supply channel, and the makers' synchronized customer-vetting regime introduced to block hoarding and resale, which the plaintiffs read as jointly policing who gets supply. Apple’s memory-driven iPad and Mac price increases appear in the complaint as downstream proof of harm.
HBM carries far higher margins than commodity DRAM, and every maker had an independent incentive to chase Nvidia’s order book. The late-2022 cuts came during the worst memory downturn in over a decade, when SK hynix and Micron were posting operating losses, and Samsung held out on cuts months longer than its rivals, which is awkward material for a case looking to rely on a lockstep narrative. Crucial's shutdown also coincided with Micron reallocating output toward data center customers paying more. As such, every allegation in the complaint has a non-conspiratorial explanation available, and under Twombly, the plaintiffs need there to be at least a plausible conspiracy theory to have a chance of success.
A leading-edge DRAM fab costs $15 billion to $20 billion and takes years to bring up, so no fourth player can arbitrage the shortage away on any timescale that’s relevant to this case. Three firms facing inelastic demand and no threat of entry can sustain supracompetitive prices through nothing more than mutual self-restraint, and current numbers show what that looks like.
SK hynix reported a record operating margin above 70% in its most recent quarter, and the investment firm Jefferies expects DRAM contract prices to rise another 40% to 50% in the third quarter and 30% to 40% in the fourth, with no meaningful relief before 2028. SK Group chairman Chey Tae-won has put the end of the shortage even further out . Margins that fat are indeed consistent with a cartel, but they’re equally consistent with a demand shock hitting a market built to under-supply, and courts have declined to let juries choose between the two unless a seriously high evidential threshold has been reached. Here, that doesn’t appear to have happened. In addition, China’s CXMT is rapidly expanding DDR5 output with state backing, and any sustained market share gains and price pressure from it would undercut the complaint's premise that the incumbent big three face(d) no competitive pressure.
The defendants haven’t yet responded in court and are likely to file motions to dismiss. Surviving dismissal would force three companies, which are enjoying the most profitable memory cycle in history, to open their internal communications regarding HBM allocation and commodity wind-downs to plaintiffs’ lawyers for the first time. If the court follows the Ninth Circuit's 2022 reasoning instead, the suit joins its predecessor, and 90% of the world's DRAM supply continues to be governed by three firms whose parallel restraint, in the law’s eyes, remains just good business.
Don’t miss out on this Tom’s Hardware Premium. Get a full year of access for just $29, or from $7 per-month. Get daily news analysis, deep dives into specialist topics in the semiconductor industry, as well as access to Bench, the largest benchmarking database around.
Luke James is a freelance writer and journalist.\u00a0 Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.\u00a0 ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-25/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Luke James Social Links Navigation Contributor Luke James is a freelance writer and journalist. Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.
hotaru251 again its goign to fail. A gov can NOT force a business it doesnt own to make soemthing. HBM is the breadwinner for profit…a public traded company has to chase profit for shareholders (or they can be in trouble). Shifting from lower profit product to higher is not illegal. It sucks but theres no law saying they can't do it. Heck, every ram maker could just stop making normal dram and still not be illegal as its their business choice. Reply
TechieTwo This isn't rocket science… If the DRAM suppliers do not collude, there is no legal basis for a lawsuit. To prove collusion you need to prove they communicated in some way to fix prices. If then just jacked prices because another supplier jacked prices this is not collusion under law. It may be unscrupulous exploitation of consumers but in most countries it is not illegal and should not be in a free market. Supply and demand are the controlling factors in an open market. Reply
Kicapan07 I'm not sure whether the motion to dismiss will succeed but this lawsuit will very likely fail eventually and only way that won't happen is if they find evidence of these guys actually colluding. As in "hey let's all cut output together for reals" type communication colluding. The article analysis here omits the biggest elephant in the room: AI. They've been cutting HBM since 2022 but a huge spike in prices only happened years later in late 2025? The analysis mentioned in the article sounds well and good in a vacuum if you weren't aware of the AI factor and how crazy they've scaled their buildup recently. Even the Micron shutting down Crucial thing doesn't make sense as evidence of wrongdoing. Micron's is trying to drive up consumer facing business to squeeze consumer prices by ……exiting the consumer business? What? I also don't see how pivoting to more HBM is illegal. There's more demand for it due to more datacenters buildup and they are AI enterprise customers willing to pay top dollar cos they are growing the bub….I mean investing in the growth of their business. You don't need an illegal collusion conspiricy for that. I cannot say for sure whether there wasnt any collusion going on, all I know is that you don't need actual illegal "let's agree to do something" collusion to explain the happenings. The lawsuit is betting that there was collusion and is fishing for evidence of one. But only with actual collusion will they have a chance. And people are hating them now but they weren't when prices were depressed and DRAM was dirt cheap. The reason why there aren't that many players is because memory is a cyclical business and adjusting to every cycle is difficult. Memory is a brutal business that's subject to comnoditzation of prices and that leads to big boom and busts periods. AI has pushed this boom cycle more extreme than usual but it will not last forever. Even if AI turns out not to be a bubble (which is an unknown), the current data center buildout is not going to keep up at this speed forever. It will slow down because at some point you'll have all the data centers you need. Reply
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/pc-components/dram/SPONSORED_LINK_URL
- https://www.tomshardware.com/pc-components/dram/samsung-sk-hynix-and-micron-face-a-third-dram-price-fixing-lawsuit#main
- https://www.tomshardware.com/my-account
- GitHub thumbs nose at Sony's controversial end to physical media with its introduction of Repo CDs — offers limited run of 1,000 CD-ROM copies of public GitHub
- How NVIDIA’s Inference Software Stack Powers the Lowest Token Cost
- Into the Omniverse: Three Workflows for Improving Vision AI Agent Accuracy With Synthetic Data and Fine-Tuning
- OpenAI mulling giving US gov't a 5% stake in the company, days after Washington delayed GPT-5.6 — Altman reportedly wants every leading U.S. AI lab paying into
- Palantir CEO Alex Karp claims AI companies are stealing customers' data while charging them for unproductive tokens — says 'livid' businesses 'are paying for to
Informational only. No financial advice. Do your own research.